Worldwide Disclosure Facility

If you have undeclared income or gains, linked to an offshore bank account or structures you need to consider if your tax affairs are in order ASAP. Starting in mid-2017 (with 54 countries) and then from mid-2018 (with over 100 countries), HMRC will be receiving detailed intelligence about overseas bank accounts, assets and other financial structures held by British citizens. The taxman intends to investigate every lead. From 1 October 2018 ultra-aggressive new penalties apply. The number of prosecutions will also increase. But you can clear up historic tax problems using HMRC's latest tax amnesty - The Worldwide Disclosure Facility.

What is the Worldwide Disclosure Facility?

The Worldwide Disclosure Facility is an opportunity to reveal previously undeclared income and gains to the taxman, without the drama of an in-depth tax investigation.

It's available to all UK residents with undeclared tax situations at least partly connected to an “offshore issue".

Discounted penalties are available for making high-quality disclosures.

The terms on offer are far more generous than the extremely harsh Failure To Correct rules which will apply after 30 September 2018.

All tax irregularities must be disclosed: not just those related to overseas matters.

HM Revenue and Customs WDF guidelines state: "If you're unsure about any aspect of your disclosure, you must seek professional help".

The Initial WDF Registration is made online: using HMRC’s Digital Disclosure Service (DDS).

After Initial Registration, you have 90 days to file your full and detailed disclosure: although we may be able to get a further 90 day extension in complex cases.

90 days may be sufficient in the most straightforward cases - where you have all the relevant information and documents readily to hand; and are certain of the appropriate tax treatment, years involved, and rates of tax etc. But that is most unusual. In the majority of cases we recommend that you take specialist advice before you register.

Agents, such as Lynam Tax Enquiry Experts, can register on your behalf, and prepare and submit your disclosure for you (with your approval of course).

Each entity concerned (e.g. individuals, companies, trusts, etc) must make a separate registration. E.g. husband & wife directors of a limited company might require 3 or more separate registrations and disclosures.

Full payment of all previously under-declared liabilities (to include tax, interest, and penalties) must be made at the time of the full disclosure - i.e. within 90 days of the Initial Registration (or 180 days if HMRC have previously agreed it is a complex case).

Time to pay arrangements may be negotiated in certain circumstances.

All years up to 2015/16 must be included in the disclosure. VAT for later periods may require separate arrangements.

All outstanding Tax Returns must be filed (correctly and completely) and the tax, interest, and penalties paid; in line with the Worldwide Disclosure Facility regulations.

Anyone undergoing a current tax investigation can still register. But specialist advice is needed to consider if that is the best approach.

There is no guarantee of immunity from prosecution but the taxman says: “Criminal investigation will be reserved for those cases where HMRC needs to send a strong deterrent message or where the conduct involved is such that only the criminal sanction is appropriate".

What if I don’t Register for the WDF?
HMRC is already getting information from the OECD reporting arrangements, and is now beginning a programme of investigating every case. Some of these investigations will be on criminal lines. The taxman has already sent out thosuands of warning letters - urging taxpayers to use the WDF.

HMRC will be able to go back to April 1996: i.e. the normal rolling 20 year time limit will no longer apply to those cases.

Potential penalties will be increased massively - with a minimum of 100% of the tax lost; up to an eye-watering 300%.

That minimum 100% penalty will only be available in cases of full, and wholly unprompted, high-quality disclosures. So if you haven’t registered for the Worldwide Disclosure Facility your penalty will always be above the minimum 100%.

In the most serious cases there can be a still further asset-based penalty - up to 10% of the value of the property or funds held offshore.

As usual, interest is charged on the late paid tax: back to 6 April 1999.

The total amount of tax, interest, and penalties could easily vastly exceed the total value of the asset itself.

In cases where additional tax of over £25,000 is charged, HMRC can use the "naming and shaming" provisions to publicise the taxpayer’s details.

HMRC reserve the usual right to prosecute in the most serious cases. Where HMRC achieve a conviction then they will use the Proceeds Of Crime Act to confiscate the so-called "criminal assets".

How can Lynam Tax Disclosure Experts help me?Lynam Tax Enquiry Experts have a huge amount of experience of all the various Tax Amnesties. We successfully had scores of Offshore Disclosure Facility cases accepted by HMRC without any challenge. We have been acknowledged by HMRC's Fraud Investigation Service unit as one of the UK’s leading specialists in using the Offshore Tax Amnesties. We can still help taxpayers with offshore assets and undeclared tax liabilities to take advantage of the exceptional terms available through other legal Tax Amnesties (including the Worldwide Disclosure Facility); and are already doing so for a significant number of clients, with the full blessing of HMRC.